second quarter. >> you have a second thought? >> people will be revising up those first quarter gdp numbers and wonder if it will carry over into the second quarter. >> do construction very well. do you want to out what your news report was? >> oh, yeah. that was april fool's, everybody. >> i just wanted to make sure. thanks to our guest host, john and jeff. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ ♪ >> and welcome to the beginning of q2. more important, opening day for major league baseball. i'm carl quintanilla, jim cramer and david faber at the new york stock exchange. it will be a packed week. ism later this morning and the jobs number on friday and hong kong and most of europe is closed after easter and nikkei got bruised and china pmi was just shy of estimates.

so our road map begins with the launch of the second quarter and we closed q1 with the second high on the s&p, but can we count on the momentum continuing? spreng has not been kind to traders this past couple of years. chinese manufacturing rebounding, but is it rebounding fast enough? we're going to take a look. major arrest on the insider trading probe related to hedge fund king stephen cooing, should he be worried? >> yes. tensions between north and south korea and the south vowing a swift response to any attack from the north. we're on the ground in seoul and we'll get a live update. we'll start with the markets and the s&p ending q1 at all-time closing highs. the dow industrials up 11%. the blue chip index has never finished a year in negative territory when q1 is up at least 8. the dow transports finished 18% higher a ahe s&p up 10% while

the nasdaq gained 8%. consumer staples and utilities all leading the way. you know the story by now, technology and materials and best-performing dow components usual suspects xp. axp, travelers, j & j and pfizer. the question is and we were talking about this before the show. does what happened in q1 mean a continuation of what will happen in q2? we know that april has been historically a strong month, but at the end we begin to fret, but it's the beginning where there are points put . the companies that reported last week, some of them got hit. they're coming back, but i think -- we'll get a little reality dose and many stocks have gone up very big, but we haven't heard anything from quarters, from the earnings and i don't know where we get great earnings to take stocks even higher. >> so are we going live with multiple expansion without the

expansion of the bottom line? >> i don't like multiple expansion because that's the idea that hey, listen, you buy it at 18 times earnings and i come around and buy it at 20 teams earnings, i would like to see it go her and that's much more sustainable. >> we have a while, but still. >> i think that the -- if you take a look at some of the sectors that did well, there is a downgrade today that's telling today. goldman says valuation stretch and they're selling at what biotech is selling at, so i think we will continue to see the gileads lead and they had compressed multiples coming in. i'm looking for retail to have a tough time. this is a very special retailer and i think you can bounce back,

but they just said that march was bad. >> yeah. >> manny came on "mad money" pvh, what a consistent performer. march was bad and the weather was wrong. >> we've been hearing that a lot, carl. a lot of them saying february and march, very tough comps and senior executives and a number of the big retailers, mall-base other andeds, same thing. >> more discounting in march and some due to weather, but i read this morning some anecdotes about auto sales may be flattening out as the fiscal tightening does put a squeeze on consumers -- it's a slow process, right? but it will happen over the long term unless job growth accelerates and we'll get that on friday. >> your house keeps going up in value and that doesn't matter because you want to put money into your house when it's a winner. you don't want to put money in your house when it's a loser. >> you've been getting back to

each if you've been paying your mortgage all along. >> big piece with the retail value and they're coming back to homeownership and they're a bigger part of the market. for the quarter, nat gas up 20%. crude up 6. lumber up 4. materials are a tricky story, too. >> remember, this march was freezing so your natural gas kept pumping and also the natural gas drilling, remember aubrey mcclendon? aubrey mcclendon predicted there would be a cessation in natural gas drilling which would drive up the price of natural gas. i was looking at southwestern which was pure nat gas. the stock had a 12% run. when you look at oil companies they tend to not do well as you point out in the aggregate. this weather will play havoc. we do need a strong employment over this week and people just say, you know what? i'll overlook any weakness in

the month of march and we'll start to get a rebuild of the jersey shore and it has not happened yet. it's still chaotic down there and there is a lot of monoel that will be given to that area. >> as we end this first quarter or begin the second and we're visiting something we discussed many time which is the fed. when is it going to stop? when is it going to end if it ends and i don't know if you had a chance to read david stockman. he has been a guest many times on cnbc, but the idea of being at some point, a punch bowl is going to be removed and what is it going to mean? is it going to have a dislocating effect? >> for 3,000 points people have been worried about that and that's what's except people out of this march, the punch bowl, the punch bowl, the punch bowl. when didn't he spike is the begger question. >> it's sophomore year i went and bought one of those

gigantic, plastic trash cans, right? >> yes. >> i filled it with hawaiian punch because that was all you could afford and i had graduated from tang. and popov vodka, and snow one knew the difference and people were blind for three days and it was the greatest party ever. >> so what? they took away the punch bowl and it was just a dynamite time and they were prepped for the second quarter. >> that explains a lot of ballmer's behavior. i'm kidding. >> ballmer was a partaker and even at my 35th reunion ballmer par took. >> and why not? >> he's a very good dancer. >> was he in "dancing with the stars?" >> he has some moves. he has got some moveis. >> think you should buy some netflix. i think number one performer and this is how ballmer gets cool. that itself is just a -- i don't know.

ballmer can get game if he buys the housing -- >> the house of cards. >> a game of throws. i. >> i watched that last night. >> which is more bloody? that or the louisville game. >> oh, terrible. >> just takes your breath away. i know. i know. although an amazing weekend of basketball. >> wasn't that exciting? >> exciting. >> more to come. >> let's talk china for a bit now. on to a double dose of data. the country's official manufacturing pmi rose to an 11-month high and it was 50.9 in march. the forecast called for activity and meantime china pmi report showed a final reading of 51.6 and that rose from 50.4 in the previous month and in terms of can't buy so many homes and you can only buy one home when they were married and you can buy

toll brothers homes in phoenix. >> we've also have been focused for quite some time on how quickly are things moving there in terms of manufacturing growth so is this a positive? >> they just have to execute a couple of homebuilders and didn't they take out a couple of pharmaceutical guys? >> it's hard to divorce the economic story from the geopolitical story. we have the f-22s and they're talking about being in your state of war which some of it is saber rattling. >> it's never comforting when a guy is pointing at hawaii and talking about a nuclear missile. >> dennis rodman was over there representing who to try to get that little straightened out? >> dennis rodman could cause world war iii. >> the nba players association -- >> he's not general marshall if i can analogize. >> no, i wouldn't put him in the same league. >> no? >> no.

>> the geopolitical threat that carl mentions, china-japan has been key and continuing to fight over those islands, japanese exports to china have dropped dramatically, but china to the extent that it is the second engine or the primary one to's certain extent in this world economy and anything yoi take away from these numbers. are you feeling fairly sanguine. >> you have the 400 million migration from the rural to the urban. at the sam time they obviously got ahead in the sales trying to stimulate the economy. i see one of the worst-performing stocks in the first quarter was u.s. steel, it was the leader, why? because china infrastructure would continue to take off. it was the leader going into the crash, andy think it shows you

whether it's the iron/or stock and these kvrnt be the leader and the market that has been led by on let me say it one more time. bristol-myers. >> and one thing you need to recognize, bristol-myers spent a fortune buying a hep c drug and it still went to 41 and the unstoppable monster and new abstracts on hep c. celgene. it's the key to this market. >> celgene is the key to this market. it's replaced tractor supply. >> that's not necessarily a good thing for celgene. >> don't take the throne from ulta, please. >> michael steinberg has been charged with insider trading and he was arrested friday in new york and entered a plea of not

guilty. it involves trades and shares of dell and nvidia that generated $1.4 million in profits. a lot of discussion, guys around this story this weekend. times tries to argue -- the a.p. tries to argue it's not about wiretaps this time and it's not about emails and it's about others that are cooperating and that's what makes this different. true? >> if you look at what the government is doing and we've been following it closely and our own jim forkin has been working closely on this and one would expect to put pressure mr. cohen. you do have that settlement that was reached with the sec, over $600 million not yet approved by a judge and jeff rakeoff when he sold citibank. that may not get approved. we'll see, but it doesn't mean the criminal wheels are not continuing to move. that said, the arrest of

steinberg was arrested people who had been following this closely. it could have been any time, frankly. the emails that are being put into evidence have been in existence and he wassa an unindicted co-conspirator. while he was there for a long time. you're looking at mr. steinberg right there, 40-year-old. 16 years. he didn't run a huge book. he had relatively small portfolios so to speaker and he wasn't next to steve all of the time. he wasn't his righthand man, senioret he was there for 16 years and he's been paying it as number two to mr. cohen. >> that said -- they continue to build the case here and it looks leak they're one step away. >> when you're the u.s. attorney you don't want to see one of your targets buy a beautiful painting and securing a fantastic hamptons place because what that means.

u.s. government, come to get me. forget about it. in the meantime i'm reading what steinberg knew allegedly about dell. did michael dell even have as good information aboutsteinberg about dell? it's entirely possible. once dell was watching his data and steinberg had his data allegedly, i'm going to throw this allege ledly because i'm a statesman. >> you can't do enough allegedlies. >> it was known by steinberg and maybe michael dell and then the guy frantically selling. >> there was a guy that likes dell and doesn't like dell and immediately dell was offloaded allegedly. >> i will say that all of these prosecution that have occurred, are you with steve raj? you go out to dinner with these guys? you are on a first name. >> that's true. i actually never did speak,

thankfully to raj. >> probably for the best. >> he was not a source, i would point out. but i also spoke to raj and i'm just going to go with the three letters, all right? it has had the effect of cushing this behavior, don't you agree? and i was wondering if the lack of performance was to a certain extent because nobody's doing this anymore. they have no edge on celgene. they don't have the quarter on celgene and bob is not giving them the quarter on celgene and that isn't what they do anymore because everybody goes to jail and jail is still a really bad place to go, and steinberg did not faint and that's unusual, and there had been faintings and how about that data and i believe it was from the piece in "the new york times" that that

he was staying in hotels in order to avoid the spector of the fbi. good details. >> he's been covering it and the guy had slacks and a nice outfit. sometimes they looked at his pajamas. >> do you think he wasn't ready? >> it was the family in florida and it was 6:00 in the morning. he knew. the doorman let him up. >> i feel bad for the guy, but these are ghas pluys that play big leagues although he's not starting in atlanta. >> 12:00, yankees. >> when we come back, wall street keeping an eye on north korea and rhetoric coming from the nation's leader. we'll get a live report from seoul straight ahead. marc faber of the gloom and doom report. take one more look at futures and a lot more "squawk on the street." back in a minute.

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nbc news richard engel is in seoul, south korea, and he brings us the latest. richard? >> reporter: there is a lot of rhetoric coming out of north korea, not just talking about expanding the nuclear arsenal, but actually using it against military bases in the united states, against the military bases in the pacific, against south kworea where i am right now. the mood in seoul is remarkably calm. most people think the leader of north korea is bluffing and this is part of a domestic power play that kim jong-un is in the process of reshuffling some of his inner circle and is therefore whipping his people into a warlike frenzy and there's now 24-hour propaganda, putting the people on a warlike footing on north korean television, but that while he's exciting his people and getting them focussed on the external

threats and the south korean enemy and the american enemy, he is secretly doing these power shuffles and trying to win the people over to his side and make himself look like a hero. the danger is this is a very explosive situation. he's talking about nuclear weapons and the distance between here and those weapons is just a few minutes' flight rocket time. so any miscalculation could have -- let's just say, very dramatic consequences. the whole world is watching, richard. i appreciate that very much. richard engel visiting us from seoul. we'll come back soon, i'm sure. some new opportunities and that's where cramer comes. we'll have his mad dash and the first one, and we'll take a look at futures and ism today. we'll get to adp, auto sales and the big jobs numbers coming on friday. squawk on the street live from the nyse straight ahead.

♪ ♪ ♪ all right. a little less than six minutes before the opening bell. time now for cramer's "mad dash" ahead of the market open. let's talk ebay. >> one of the things that continues to happen is there's this chatter around the ebay quarter that it's never doing as well as people think. paypal will run out of gas or the auction business. they had a meeting last week that, you know, i can go on and on.

>> analyst meeting. >> yeah. and what it is is that paypal is considered to be visa and mastercardlike status. why do people always think this thing is petering out? >> i don't know exactly why? united states maybe because it has in the past and they somehow expect history to repeat itself. at the same time donohoe has gotten an awful lot of praise to have guided a turnaround of this company, jim and some question whether it can continue. look at the market cap on the visa. what's visa's market cap? $130 billion or more? >> i think that paypal has taken the consciousness of the people who fear being hacked because paypal is kind of a hackless system, and i think that's important because as we discover, people aren't taking credit cards -- taking credit cards the way they used to. seeing a lot of that kind of chatter so i like that situation and i don't think it's done. >> why would there be another management buyout after dell,

but here it is. >> this is the kind of thing, david, that i question. this is a family that owns american greetings. they've got the stake. they do a low-ball bid. dell does, a lot of people feel a low-ball bid, but david, who has better information? they have perfect information. is that fair? is it right? >> it is always the inherent conflict when you have a management-led buyout, one would wonder whether you would see another one and we've seen it already and half a billion dollar company. >> greeting cards. >> yes. >> thought they were dead? >> bigger than ever. so is the opening bell for the opening quarter. bigger than ever. the bulls, you know where they came out in the first quarter. we'll see who wins the next when we start off that second quarter right after this.

you're watching cnbc's "squawk on the street" live from the financial capital of the world. today it is the collision of two of the best shows ever to grace the airwaves of american television. "squawk on the street" and "general hospital," 50 years,

jim. >> i thought that was incredible. 50 years. >> i remember watching it when you're growing up and how could it still be on? >> not many of them are. >> yes. you got that right. there is the opening bell and a look at the s&p 500 at the top of your screen. as we mentioned, we call it a daytime drama, not a soap, general hospital celebrating the 50th anniversary. luke and laura are, in fact, here. jeannie francis and kelly monaco. and they're kicking off national parkinson's disease awareness month. so we are off to the races, jim, on q2 and interesting take in the journal today overall about the spring. we mentioned it has been rough the last couple of years and we've had a japanese earthquake there, and fiscal emergencies there. >> can it slow down a linkedin.

>> i did a piece last week for linkedin and he does our trick media work at cnbc. the reach, even of their writing and linkedin has become a member of the club that you're not a member of the procession. i remember when it came public and everyone said viciously overvalued. it turns out it was the only one that wasn't overvalued. >> we had an upgrade. target increased from pacific crest and today it's jefferies raising the price target to 2.15 and not as aggressive as hargraves 2.25, but still, people are seeing it in the twos easily. >> it's got momentum and the alltech has potential momentum. cisco, my charitable trust. come on to one of these late friday dividend boosts. linkoid in has got revenue

momentum. maybe tech can break out of its funk. tech has been in a terrible funk for the year. >> reid hoffman. they have such power now in the business model to expand it beyond what you saw initial ly. >> right. >> it's just an incredibly powerful tool that is broadening all of the time. >> i've been doing this old dog, new blog thing at the street with my friend ross erkin, the research director of "mad money" there is this particular gulf, with what younger people use with the web. my demographic is still putting www. no. now that's world wrestling something. the web has passed us behind.

we know what fit it is. >> we do? >> you're part of the passby generation. >> it's not in my aol, i'm sorry. >> linkedin is something that's bubbled up from younger people. we know that there are a lot of devices. i've been sending my kids an emoticon. do you know what it is? >> i do. >> can you speak emoji? >> i find there are a lot of people who follow these small apps. i think a lot of them will come public. we need one company that basically amalgamates all these apps and comes public because one of the things we're seeing is people willing to pay for content online. did you see that? the pay wall is going up everywhere? i think there is going to be a revolution where even younger people start paying for things. >> i think that's true. >> i think it would be good for journalism. >> you guyses covered ebay in

the general mills near the top of the loser list and is that in any way signal or will it signal any rotation this quarter? >> ken powell, the ceo was on "mad money." a lot of things going their way that got a great tailwind and inflation in the raw costs coming down and there seems to be a cessation of price wars and it's selling at the valuation. people want that yield. cliffs got hit by a last day sell piece by morgan stanley, and i think that you wanted to show that you did know crest. because crest was the worst performer and if you showed that you owned cliffs that i would think that you would want to jump off a cliff. people were running out of that one and cliffs is worth more and general mills has reflected this

downgrade pretty heavily. a couple of media plays. piper raising its price target on cbs up to 55 and credit suisse you pointed out, upgraded news corp., hold to buy. >> news corp., the split's coming. one of the things we've seen is you get two legs to win a split when the company breaks out. there's the initial -- wow! unlocking of value and once you get the pieces, a second value, sara lee. philip morris, altria. i think people were trying to get in the second leg. not a lot of debt than was anticipated and we came out with the proxy in terms of the split and what would be on the publishing side and still a question as to whether mr. murdoch would try to acquire the l.a. times although there may be some cross ownership rules that prevent that from happening and the big media continues to be return of capital both through repurchase and dividends and you're talking as much as 10% of the overall market cap of these companies in one year being

returned in both those forms. that's the story in media and that will continue to be the story until we get another wave of consolidation. >> so cbs, i have to admit i watch every game that i can watch and they run these ads that are like a stock ad. number one comedy. number one drama. number one new show. what is this? to get cbs to 55? is that what they appeal to? do they want the stock higher? >> yes. he's an economic animal, that man and he wants the stock higher, without a doubt, not that any ceo doesn't. >> number one commercialmaker. number one -- enough already, but apparently it has good ratings. >> in the fall of this year that was not the case with cbs and moonves did come on and sat right there with me and said we're going to be fine. don't you worry. >> he was right about that. he was right about that. >> the dow's currently off two

points and let's get to pisani who is on the floor. >> hi, guys. happy monday and happy start of the first quarter. pleasantly, historic highs in the s&p and the market has had a defensive tone recently and if you notice the market leadership has been health care, utilities and consumer stocks in the last couple of weeks and the financials, the drill, and the basic materials stocks are all a bit lagging and i don't think people are concerned about it, but it has been noted here and the good news is when you get the kind of quarter we've had,iblely the following three quarters are all positive. s&p capital iq noting historically, the following two quarters are 1.2, 1.1 since 1945. a lot of numbers floating around when you had such a strong first quarter. as far as what will happen this we week. we call it central bank, and the ecb and the bank of japan

meetings and he will will ensure the depositors in europe that everything is safe on the insured levels and the probability that anybody will need money above that will will be very small. he'll be assuring people that he will provide liquidity for sound banks and watch for that phrase, sound or structurally sound bank. he will go to great lengths on that. everybody has been short the yen. it's the biggest trade in the floor, and the new head of the bank of japan will tell everybody that they have not anticipated. the yen is down, what? 15% so far this year? the nikkei is up 38% since the beginning of november. don't you think there might be a yen rally on thursday just in anticipation or its sell on the news kind of thing? that's what i heard over the weekend. we'll see if that actually happens. meantime, see what's going on in china. lowest levels of the year in the shanghai composite, down another couple of percent this year. the chinese p, mi, and it was

below the consensus that people thought. we've also seen an increase in home sales as people get in under the new restrictions and there's a concern about that. so japan was down today, about 2% and they had the tankan survey. the numbers are still pretty good, but still below the consens consensus. the bank of japan will be big on stimulus, and reverse the deflationary cycle and the household survey they have anticipates prices will be higher. everyone thinks this guy will do miracles at this point and they have a lot on their shoulders and they certainly make it right now. >> in terms of valuations in the u.s., and i know you're talking about general mills and the downgrade with morgan stanley and we're seeing this with other sectors that are high valuations and airlines is one to look at. the airline index up about 25% so far this year. we're starting to see downgrades and ever core, recently

downgraded today specifically on the valuation issue. >> raymond james a couple of weeks ago downgraded usa and delta specifically noting that they appear to be fairly valued here and we've had the same problem with homebuilders and some of them were two times forward estimates being downgraded a couple of times. >> my point about the airline is there's been a tremendous improvement since 2009. >> it's astonishing how the airline industry has turned it around. >> united -- delta and united now rank number 7 and 69 in the s&p 500. these companies were microcap companies in 2008 and 2009. number 70 and number 69 airlines in the s&p 500 in revenue rankings. back to you. >> yes, people have to understand the power of this u.s. airways combination with amr. i know they said they're not

going to raise price, but boy, there's very little coverage tigz among routes and that's what you have to focus on. let's head to the bond pits with rick santelli at the cme group. >> everyone is flabbergasted for the first quarter of the stock market and the markets are making highs and you can't pick a top, but many other markets seem like they're developing or forming a range formation. look at intraday of tens. they made it up to 189 and they're virtually unchanged now at 186. open it up to year to date, this is a market that looks like 180 could be the bottom of the range. the fly in the ointment? look at the boon. the boon pattern doesn't look like it's fully developed to the down side and that's one that you want to pay attention to on the spread. let's look at the dollar index, if you look at the chart it looks like it's running out of gas and we only had one close wednesday above 83 and that was

the first one since august and that's the pivot you want to pay attention to. let's look at the currencies individually. it you look at the euro, it too, looks like the bottom end of the range. many say that could be your value range and last, but not least, after reaching a lofty 96.25 in march, the dollar-yen looks like it's in a formation to potentially reverse. so it should be an interesting second quarter and there's an awful lot of data to kick-start it, starting with ism at the top of the hour and i'll bring it back to you. >> it set the tone today. let's checkity on latest moves in commodities. >> we're looking at oil prices, and the first trading day in the end of the quarter. although we do d see china's

11-month data. we're looking at wti prices that are even lower than that with the relative value there, because of some traders that say there will be problems passing the keystone xl pipeline and this was after we saw a major spill over the weekend in arkansas. exxon mobil continues a cleanup of this oil spill near mayflower arkansas where they're cleaning up right now. they've recovered 12,000 barrels of oil and water. this happened after a pipeline ruptured on friday and a lot of traders are saying that now maybe there will be more concern, increased concern about what may happen in terms of the keystone xl pipeline, because this pipeline was carrying heavy crude from canada and of course, there's been a great deal of environmental concerns about the keystone pipeline. the fact that this should be suspect portative of oil prices

as we're seeing highes prices across the board. >> marc faber, and as we go to break, take a look that the morning's early movers. back in a minute. at tyco integrated security, we consider ourselves business optimizers. how? by building custom security solutions that integrate video, access control, fire and intrusion protection. all backed up with world-class monitoring centers, thousands of qualified technicians, and a personal passion to help protect your business. when your business is optimized like that, there's no stopping you. we are tyco integrated security. and we are sharper.

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>> here are >> here are some of the other stories we're watching 17 minutes into the trading session. apple has been denied a trademark for the ipad mini. it told the company in a letter that it had not made a strong enough case to own that phrase. apple has until july 21st to make its case. >> the toy retailer citing unfavorable market conditions and recently announced executive leadership transition.

and paramount's "g.i. joe retaliation" at the top of the weekend box office. the film has taken in 51.7 million since opening wednesday at midnight. shares of tesla, up 14%. sales of its model s have exceeded targets and it's been profitable on a gap and online gap basis. he promised some news this month and investors appear to believe it. >> look, the car's great. i don't know if you guys have tried it. >> i know you have. i have not. >> it is just beautiful. the short case does dissipate with these numbers and there are so many people -- so many people don't trust musk. he has delivered. solar city's been a winner. >> he's a great entrepreneur. >> yes. whether or not he can have a profitable, sustainingly profitable business is the

larger question, but he's a great entrepreneur. >> yes, he is. solar city, my kids say go to them and put a panel put on top and younger people are so into what he's up to. i keep talking about the generational gap. younger people understand renewable energy the way we do not, and they seek these things. a very young salesperson selling me the tesla, the guy was about 23 and they're looking at me, like, you're the enemy of our atmosphere unless you get a tesla. >> he wants to spend me out of the atmosphere, too. >> there's the willingness to engage with the media in ways that might not be beneficial to the stock. you remember the big fight with the times. the last time he was on our show was for the ipo of solar city and it got a little testy. take a listen. >> i think both companies will

ultimately be quite profitable, at least in line with other publicly-traded companies. and so, our goal is to -- with both companies and our aspiration is to make a reasonable profit while growing the business as rapidly as we can and i feel confident of achieving those objectives. >> obviously trying to cage the issue as much as he can and some believe that he does repeatedly come to the public market to dump these things on witting investors. >> i wish he's dumped solar city on my charitable trust, up 60% and this was after a 40% pop when it came public, and i don't know. if this guy is a charlatan. well, let's have some more charlatans. >> this iss better than the financialization of the governmentment. i'd rather see guys like this

take shots and calling that technology which is what they did, by the way. securitization technology. >> actual technology is a winner and we discovered that financial technology was not fathomable even for -- i have a friend who has a doctorate in math and called in to analyze the cbo situation. he just said i can't figure it out. >> same as the guys at j.p. morgan when he started to throw around all of that stuff that at the end made no sense at all. it didn't make sense. >> that was all nonsense. >> right. >> but you're not late for dinner. >> no. don't call me late for dinner. >> i do remember -- >> starbucks. bernstein was seaing starbucks might be weaker. >> i had to leave starbucks this weekend and go to a dunkin' donuts because i couldn't stand the line in philadelphia. take that! >> i will, with a double --

>> triple vent i cap chino with skim wet. i had to go to a dunkin' donuts skim. >> you enjoyed it. >> i did. >> netflix shares have doubled this year. yeah, this year. that makes it the best performer of the s&p 500 for the first quarter, but should you bet that rally will continue in q2 or maybe get out? stay tuned. ♪ ♪ coming up, it may be april fool's day, but cramer has no tricks in store for you. his six stocks in 60 seconds is all business. "squawk on the street" will be right back.

no better way to start a monday morning than "six in 60." coach, was number one. >> i tweeted the new shoes and people said it was a feti fetish @jimcramer. no, they're great-looking. >> goldman, hold it.

we've been waiting for this, no more beer wars. beer pricing has stabilized and this one goes much higher. >> jp cutting intel numbers. >> it doesn't seem to go down very much. >> wells father low says buy hk. hooz a money maker that bought a lot of from hunt. >> this is incredible! this is ed greenberg! keurig is holding in. >> hold the potash. >> the cash flow is much better and the stock is very inexpensive if you believe in the ag group. >> so with an interesting week setting up, what's for tonight? >> we are analyzing and last week was big biotech. this week is it's little boy owe tech. a lot of people love these. we're trying to separate the speculative weak with the speculative chaff with the chaff being suicidal. >> you advised home gamers to play these because so many have

been burned by a bad phase 3 trial. everybody should have a speculative stock in their portfolio and keep themselves interested. they were able to use the breast cancer drug and some of the orphan drug companies have been remarkable. >> we're looking for small companies that can take off. >> we're very excited about the searies. >> 6:00 and 7:00. we'll get infrastructure and ism spending and marc faber on the gloom and doom report. back in a minute.

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. welcome back to "squawk on the street." we have february construction spending up 1.2, a bit better than expected, but ism not the case. weaker than expected, 51.3. 51.3. how does that fit in for the recent run? that is the lowest level since december when we were at 50.2 and keep this in mind, if you were watching the s&ps, they started to give it up about 45 succe seconds ago. so it's one of these numbers where maybe positions get

nervous in front of it, prices paid and moderated to 54.5 and that's also a lot lower than the 60 level or 61.5 from the last look in february and it brings into account a lot of issues, not the least of which may be some of the slowing we're seeing in certain areas. just think european manufacturing and maybe it's having an impact here. we know commodities haven't kept up, for example, with equities. this will be something to pay close attention to. yields dipping below 185 and david faber. it's all yours. >> thank you, mr. santelli. >> we have a lot of data to digest at the top of the hour and let's bring in senior checks reporter steve liesman. i'm looking at it, david and the first thing i want to explain is that we're talking about two different months of data and the february construction data better than expected. a quick word on that, a rebound in private spending had been down 3.1% in january, now up

1.3%. public spending also on the positive side, 0.9%. residential was up, lodging was up, everything was up except for transportation and education in the data. now let's talk about the ism which as rick said worse than expected. the only positive i see here looks like employment which was up to 54.2 from 51.4, but as rick said, prices paid was down quite a bit. exports was up also and imports unchanged. so some decent details in there, but overall a disappointment. some of the regional ism surveys and manufacturing surveys from the federal reserve had pointed to this weakness. auto sales 15.3 adp. 194 is the estimate. ism non-manufacturing and that's the service sector and going ahead to thursday. payrolls 200,000 and an employment rate seen at 7.7%.

the tracking stuff we've seen from the better than expected personal income and spending numbers on friday if you weren't paying attention, that's to be understood. it was a day off, but the government still put the data out. that tracking data has the first quarter estimate at 3.5% which would be one of the strongest we've had in quite a while, but the market is sort of done with that and the question is whether or not this strength continues into the month of april and the second quarter and a lot of division as to whether the higher social security taxes and other issues declines in government spending tend toec whatten the economy in the second quarter. i don't think anybody expects this 3.5% strength to continue into the second quarter with the question being are we at 2% economy or something below that, carl? >> steve, interesting data nonetheless. from the u.s. markets to global markets, paying very close

attention to the situation in north korea. the country's leader defied warnings from u.s. and north korea. jim maceda has more from seoul. >> it could be more than saber rattling. north korea's missiles and artillery are reportedly combat ready and now pointing at both south korean and u.s. targets. both sides, north and south say they'll strike at the slightest provocation, and north korea's leader kim jong-un has even threatened preemptive nuclear strikes on south korean and u.s. targets. that's really unprecedented though many experts are saying they don't believe that kim has that capability. south koreans do tend to see kim jong-un as the boy who cried wolf, if you will. they lived through many of these belligerent threats before andiblely during the war games, the joint u.s.-south korean

military maneuvers and only to see that rhetoric dial back. one sign getting a lot of attention today is last night's statement by north korea's bureau saying that the country would pursue its nuclear arms program, but at the same time it's going to also work on its economic development and experts today are saying that that's a signal that north korea really wants to engage again with south korea and not go to war. so in the end, koreans could well dodge a bullet this time and both north and south are on a knife's edge, back to you program. >> jim maceda reporting from seoul, south korea. >> we're talking all things euro after the break. >> plus take a look at this chart. shares of netflix were up 106% and that's just since the beginning of this year so will one of the best performers, the single best performer, be able

to hold on to that performance after q2? we're talking netflix after the break.

welcome back to "squawk on the street." we want to welcome robert frank the correspondent joining us on post 9. >> honor and a privilege, as always. >> we have stuff to talk about today regarding the wealthy. >> in some ways, good and bad and we'll talk about cohen. the ups and downs of the rich. >> very nice. >> i always like to follow that.

something else we've been following is the situation in cyprus and the country's central bank confirming that major depositors will lose 60% of any savings that were over 100,000 euros. euros. tim adam is from the institution of international finance and also for international affairs. tim, i would love to take a step back first for our viewers and i know many of them have been paying close attention and some wonder why a country of 1.1 million people should have any impact whatsoever and why we should be following this as closely as we are. so let's start there, why is this so much more important if, in fact, you believe it is than it would indicate given the size of the economy and the population? >> sure. good morning to you guys. despite the diminutive size you have to think about cyprus as a potential, systemic problem in terms that the actions taken in cyprus could take precedent in other countries that could cause

markets to be nervous and we've seen a fairly negative market reaction to the cyprus workout this last week. let's get to the larger impact you mentioned and to penalize the depositor and even those with less than $100,000. what, in your opinion is the broader impact, particularly as it relates to the broader euro area, given what we know that the point. >> it creates questions about the sanctity of the deposit guarantee, and it also raises questions and reminds the markets that, in fact, the architecture of the euro area is incomplete and they need to complete this. we need deposit insurance. we need a central resolution mechanism and we need a central supervisor. it's just a reminder that the euro project is incomplete and needs additional work. >> is it because they need the start of the drawing board.

draggy has been talking about the start of the union. is this a plan that is already in people's heads or not? >> some of it is about implementation and the ecb is about implementation and about a sing single-banking resolution and the common rule book for the euro area and all of these need to be accelerated from the current timetables because of the exodus of large depoz tors. ? what country do you think we'll see that first? >> there was a lot of discussion about slovenia. i don't know if it was slovenia or any other country and you have to worry about where depositors throughout the periphery get nervous about the sanctity that guarantee for insurance, but also worry about their relationship between banks, balance sheets and the sovereign balance sheets and the

officials need to break that linkage. they need to break that linkage. >> if you have some sort of eurowide deposit insurance scheme, it would also imply what the germans certainly want which is more power to actually dictate the reforms that are necessary, reporting back to some sort of a central authority and their ability to actually undertake austerity on behalf of these countries. it comes to the bigger question, doesn't it, tim, about whether this thing can even work. >> i think it can work, but decisions like cyprus call into question the decision-making process. they need to focus growth which is the pmi numbers out of the euro area tomorrow and on thursday and in germany in particular, they need to focus growth. they need to focus on banking union and fiscal integration and the competition in the process. >> in the last three years, we seem to have a crisis every

spring that involves europe. if it's this one, then it isn't much. what are your expectations as this year moves ahead. april is the crowellest month so we'll see if there are other potential problems. i think it's about getting some of these central architecture issues right. banking union for one, deposit insurance and central resolution mechanism and implementing the decisions that have been made with respect to the ecb being the supervisor, and if they accelerate reforms and it may help bolster market confidence in the banking sector. >> as always, appreciate your insight. thank you. tim adams. >> we're getting ready for a week of major economic releases and it all builds up to friday's jobs number plus a look at the landscape for q2 and we'll do a deeper dive into the battle to go public or not. marc faber of the gloom and doom report. what's worrying him about the market?

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>> sac portfolio manager michael steinberg being charged with insider trading and he earned a plea of not guilty. the case includes shares of dell and nvidia from 2008 and 2009. they generated $1.4 million in profits. kate kelly has the latest on this ever-evolving story. >> you said it right. the likelihood of a steinberg indictment was telegraphed so much so that he stayed in a hotel overnight to avoid having his family watch his arrest. when the feds came to cuff him and indicted later that morning in a downtown court. steinberg's indictment is clearly a blow to sac given his seniority and tenure with the company. steinberg joined the firm in the

1990s right out of college and worked his way up to senior portfolio manager on the hedge fund often working closely with coh cohen. it seems damning at first glance that steinberg used insider information to avoid a short trade and asked underlings to be discreet about the tweet because normally we would never divulge data like this, unquote. still, dineberg pled not guilty to the securities fraud and his side of the story could always prove compelling counter evidence as did the firm's defense in the martoma matter which indicated that sac had no net gain from the stocks sold allegedly according to an insider tip. a lot is on the line not least of which that cohen himself is indicted something the feds have been working toward. the statute of limitations to

the steinberg stocks or the martoma ones would be this summer, david, because the trades occurred 2008. meanwhile, the $15 billion firm which lost $1.7 billion from investors in february faces another key redemption deadline in may. >> the clock is ticking, kate, you point that out and it does seem, though, if you were putting this all on paper they're -- it reminds me of the wire and you put up on the board all of the guys they're after and they're getting closer and closer to cohen. that becomes the key question. what is the hope if you're a prosecutor from getting steinberg, from having martoma and neither of whom have at this point turned. do they need them to or do we think that they're, you know -- >> the indictments of these guys puts renewed pressure on them to consider flipping against cohen or, i guess, other senior folks at the firm to the extent the feds are interested in other people. they both have young families so

the motivation would be great to avoidsentence and time away from the family. their lawyers' statements have gone far beyond no comment or my client behaved with integrity and i'm paraphrasing and there's not a shred of evidence here that mike steinberg behaved improperly, this is way off the reservation. again, paraphrasing, but that's the tone of it. he's saying there's absolutely no truth to these allegations and the attorney for martoma has used a similar tone. hard to say whether these guys are going to flip or they've dug into their not guilty pleas. in terms of cohen i would simply say yes, it's clear. they've been making a case against him potentially for years, but after all these years they still haven't gotten him. that raises questions about the goods that they have. >> and we continue to analyze his own behavior when it comes

to selling and buying homes, and art. >> and he was doing a lot of buying. david raised a really good question last week which is that is steve cohen making these purchases to protect these assets? a lot of people have asked me that on email and twitter and we took a look at just how possible is it to buy this piece of art. he bought the property in the hamptons for $60 million as well as la rev, that famous pick asso painting and bought that for $45 million and both of these purchases both within the same month. the answer, in short, is no. any kind of action protection trust that he created after litigation is no longer valid. a lot of doctors go to their trust attorney and say, look, can i create a trust to protect me from this lawsuit? you can't do it once you have the lawsuit. that's number one. most of the investment comes

from cohen and other people within sac. so 70% of the assets in the fund are theirs. so it's not like you have investor claims and he's got a net worth of $10 billion. it is unlikely that he'll have trouble paying his legal bills or settlements. he did not buy these to protect the assets and he did buy these to show confidence to show this is not bothering him and he wanted this painting for years and he wanted the property which was on the water and near his place for years and they're opportunistic buys, but something to look into nonetheless. >> kate, you know, $600 million settlement with the sec has people thinking maybe this moved to a different realm. that hasn't been approved by a judge, but i do wonder what your take is throwing that in here, as well. >> that's a great thing to raise, david. the settlement, the bulk of it is 600 million and change of it has not been approved by the judge because of this issue of

sac not admitting or denying and they're starting to balk at the statement and these resolutions. in terms of cohen he's tried to telegraph a sense of confidence to friends, business associates not that he's commenting on these cases, but just that he's setting the tone. he recently donated a significant amount of money veterans with post traumatic stress disorder. for a guy that's a shy person in terms of public appearances and mixing and mingling on the social scene even though he's very outspoken from what i understand on the trading floor. he's getting out there in a way that he has not in the past and the message they're trying to send is significant and quickly getting back to michael steinberg, the body language from sac to steinberg has been very supportive, unlike with

martoma. they made a statement in his defense almost immediately after the news broke on friday. they've kept him on paid leave which i'm told in general is an indication of a company's confidence for somebody not noting to penalize them by docking their pay when under a legal cloud, but at the same time feeling like they can't keep him in the office when these allegations are around. >> steve cohen got his start as a poker player. he's a trader. you have to project confidence. if your opponent senses weakness you're nin trouble. his counterparties and investors, he wants to show right now that none of this matters to him. it's classic poker player move. >> if he were to be indicted, would he be the wealthiest man ever indicted? do we know? >> i'll throw that at you maybe for a future appearance. >> malkin and both -- >> they were not at 10 million.

>> milken, maybe? >> yeah. >> i don't think so. >> he might be close if -- >> if. i can tell you, listen, people at the firms continue to tell me business as usual. you have to remember, what, they have about a hundred different teams that run their own pnl, essentially and they're kind of doing their thing as is saying, well, you know what? you can't necessarily focus on every single day what's going on here. they're in there to make money and they're all economic animals. so what i hear whether investors are trying or not, much of that capital, of course, continues to be cohen's and the rest of the firms. >> absolutely, david. you know what's interesting is i've gotten the same tone from folks inside sac. it's business as usual. in fact when the legal stories or media accounts come up and you ask them about it, we put martoma behind us and we're moving on and this is a non-issue in the firm. to us on the outside that is hard to believe because there are serious questions that need to be answered and we heard

about redemption headlines and statutes of limitations and so on. i do think it's a testament to the culture of the place that they continue to go about their business and hopefully we'll get a sense of their first-quarter performance some time this week. they were certainly in the black and i believe they were up 3.5% to 4% in january and we hope that continues as this equity pushed on. >> one more he's trying to prove on a numerical stan point. thanks a lot. >> kate kelly, is north korea still a threat and yet dell proxy forced one analyst to take down shares of estimates today and why dell is looking to exit the pc game all together when we come back.

almost an hour into trading. some of the stories we're squawk about 7:30 on the west coast, 10:30 on wall street. the forecast did look for 54 and the number still above 50 does indicate a fourth consecutive month of manufacturing sector expansion. amex, visa, mastercard among the stocks hitting new record highs today and american greetings up 12%. the greeting card company agreeing to be taken public by the weiss family for 18.20 a share in cash.

>> ubs lowering its estimates for dell citing pc pricing pressure and required investments. this comes on the heels of dell's 274-page outlook that led to its decision to take that buyout offer of 13.65 a share from silver lake and michael dell. we reported on the details in that proxy a few weeks ago. steve joins us from ubs. steve, you've been following this sector for a long time and you know your way around m & a as well. my first question to you is simply why do you think blackstone seems willing to pay more than $13.65 and jump this deal? >> well, they've got dave johnson who went to blackstone from dell so he knows the company intimately and they believe they can do something with it. what's interesting is that michael dell and silver lake's approach doesn't seem to be doubling down. i would think they would look at something to sell off the lower

end consumer pc business so you don't get the sense that they know that much more than we do outside the company. i'm not quite sure what blackstone is thinking, but they get to come in with a full bid and we'll see what happens. >> they have got come and they've indicated they will, but we haven't seen it and they've got a couple of weeks to do that and meanwhile, the business is deteriorating and this was something they got a few weeks ago. the key number, 5.6 in july for fiscal year 2014 and now it's tracking closer to 3 billion and that doesn't send a good signal, does it? >> no, the proxy reads fairly negatively and you expect michael dell to present things negati negatively. they have not guided this year to the street and that plan is under guidance which is why we've taken our numbers down. you're continuing to see tablets displace notebook, but the bigger change is the fact that dell apparently has to invest

substantially in the business to become emore of an enterprise company and being aggressive in emerging markets and accelerating rnd spending and that's where most of the estimate reduction comes from in our model. >> those who see value here, southeastern point to that enterprise business. do you agree with that assessment that that's been undervalued by the market and while it's still 35% of overall revenues that it will be a significant generator of profits? >> i have to say we've been bullish on that part of the company believing there is a chance for dell to become a low-end infrastructure player using newer technologies. i have to say that reading the proxy does suggest it requires much more investment than we previously thought. there's talk of acquisition not hitting the plan for revenue, cross selling and not coming across as expected. so it is too soon, and it does

mean it will require to get there. >> does it matter to you or not whether he'll be ceo. interestingly, boston consulting group did a study and they suggested that the company has been overoptimist being for seven quarters and there may be some management changes, so we do expect a coo. we do know michael will be there and he'll be fine, but it requires other things for date to succeed. >> i think a lot of people are are wondering why blackstone would pay 14.30, perhaps each more, per share of this dump. given what you know about the proxy and what you know about the business does that make sense to you? do you think they're willing to take a less return and higher risk or is there a way to re-engineer this company that we don't know that the point that is going to lead to that being a beneficial offer for them? >> well, it's clear that some of

the other private equity firms did bow out and probably scared away by the trends in the pc business. i think there is some opportunity here. i do wonder if you don't have to be a little more transformative. i believe blackstone is looking to sell dell financial services which the michael dell bid does not contemplate and longer term, there is a chance of enterprise services to provide a more simplified approach for customers, but it is going to take longer to get there than many of us previously thought and that's michael dell's point. we think we'll get there, but it will mean rough earnings for the next two or three years and the public markets may not be able to stomach that. >> he doesn't want a public stub hurting conference. steve milunovich at ubs. >> stocks trying to push higher and still on record, although we're yoerp near it today. head of institutional portfolio strategy joins us at post 9.

welcome back. >> not exactly getting the quarter off with a fed. bernanke and the fed have talked about the sustainability of the momentum and we saw it come in strong the first couple of months of the year and bernanke was saying wait a minute, we need to see this sustained for a few months and don't get this concerned and had he pulled back the qe any time soon. how deep does this retrenchment last is the big question. >> we've seen ism peaks between 55 and 60 that have led to these summer swoons. sometimes they've been more prolonged, however, more eight, nine-point declines. this was significant. it caught me off guard. it caught a lot of people off guard. you saw the newers component and the numbers component were down. >> three components were positive at all month on month. >> i was disconnected with some of the other data we've seen. so more data this week in terms of employment. we'll have, you know, that out

on friday so we'll see if that trend continue, but i think it puts people on notice a little bit in terms of that sustainability that bernanke is talking about. >> does it make non-farm more critical? you dernt want to start stringing theseth that all of a sudden that march was the start of another slowdown swoon that we're seeing. where are we right now in that market. it's been these pseudobond equivalents and health care and beg, high dividends and not all of the way into the risky assets and just dipping your toe. you've seen a little allocation at the bond and people are more comfortable in the defensive equities as a proxy. >> what gets us moving higher from here. if it's been multiple expansions so far and if we don't see follow through from the second

quarter. >> near-term we'll probably get some weakness. bonds are oversold and stocks are overbought and as the momentum starts to pick up in the summer, second half, that's your next leg and the sustainability is the important thing. we've seen housing pick up and we've seen autos be very strong and that's different from the dips we went through over the last couple of years where those weren't underlying supports. the underlying trend is buying us time and improving here, and i think that will continue. >> a lot of discussion whether the wealth effect from a rising market sustains consumer spending in a way that it can offset fiscal tightening and i wonder how important is it that stocks remain richly valued? >> it's been the stock market effect versus the tax effect and again, it will be the jobs. we need to see 200,000 and not drop back to 130,000. >> how important is it to you

that materials and tech start playing in a major way here? >> the most unshall thing about the rally is in the 15 years i've been doing it, i can never remember that stocks were at all-time highs, but staples were so overbought that i wouldn't be recommending them and they're usually not that extended. so other leadership areas will have to kick in. to your question, i think it's very important that the cyclical areas will have to start to participate because these are extended and expensive on a relative basis. >> targets? >> i don't think you can do official targets and the official is 1585, just a stone's throw. good to see you here. ? we have an energy here to josh lipton. >> check out hess which is enjoying a spike this morning. the news just announced and hess has entered into an agreement

with lukoil to end the russian subsidiary after tax proceeds to hess. it is expected to amount to $1.8 billion. so far this year hess has announce order completed sales in interests in the uk and texas among other areas. hess popping about 2% right now. david, back to you. >> hess involved in a nasty proxy fight with elliott management that owns 4.4% and we've reported on it many times. over five board seats and the annual meeting not that far away. after the break, the netflix stealth rally after clocking in as the top performer in the s&p 500. well, is the run coming to an end? plus, attention game of thrones fans and we have a celebrity, it's a medieval-style wedding it is coming your way. that's a little later on. revolutionizing an industry can be a tough act to follow,

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as we kick off a new quarter we'll take a closer look at netflix. it was the best-performing stock in the u.s. in the s&p in the first quarter, up about 105%, but is there even more room for that to go from here? barton crocket is senior media and entertainment analyst at lazard capital management and the price target is $200. barton, let's start off with what worries you. there's a lot of positive things to be said here and are you still concerned about the declines in the old dvd business or how much they're spending internationally. >> my biggest concern is just a volatility in the stock and i'll have a $200 price target. it's hard to make a coherent investment up or down on this stock, but if you look past the volatility, i think what you

have at netflix is a business where you don't worry about the dvds and today it's a streaming business and what you want to focus on in the u.s. and these guys are getting tremendous traction and we've done survey work that 40% of consumers today have netflix or want to get it and that number keeps growing every time, and they'll replicate it internationally and they're spending so much money on content that they don't need to grow out aggressively here and they're spending close to $1 billion, and it's a lot more than discovery and stars. they're spending a lot to have critical, massive content that people want to see. i think it is to grow the subscribers and you'll see a margin that will grow to the 40%, 50% margin and like hbo and stars and much better than the low-single digit numbers you have today. >> we're having a discussion about how much we would pay to be aggressive on their pricing.

do you see that on the 2015 story? how much elasticity is in the consumer's profit. i think this is a pricing opportunity and not in they have a little bit of money that really love video, but we're not there yet. they're still getting the destructive price hike of a couple of years ago. not this year, and we have that in our model and i do think they have some pricing leverage. if you are signed up for hbo you're paying 15 bucks on top of your core premium video package and they're setting up three movie channels and they're paying 30 bucks and they're in the same league as the three movie channel package. they have leverage to move it p up. >> and they know their customer extraordinarily well and they seem to be able to respond so quickly and to come up with the holy grail of this content.

that being said, amazon, they're a pretty good competitor. what about the threat there? >> it's interesting. a year ago or so i was skeptical about netflix. they morphed from a catalog of stuff that everyone can get to a service that focuses on exclusive content including a lot that they basically contract themselves and the thing that's amazing is they've done a great job of that and they created "house of cards" which was great success and a deal with disney and dreamworks animation movies and this looks like what hbo put together and i would have never thought that for a guy like reid hastings. and he has created a new tv network. so i think over time they'll be more like the financials that we see at tv network companies like their content profile is becoming like the companies, too. >> robert frank was on set and we were talking about reed hastings' net worth during the

commercial break. what has a 100% move done for his household? you talk about a house of cards. in the fall of 2011 f you look at his wealth at that point when the stock cratered, it went from around $800 million to $200 million when the stock crashed and everyone thought this company is dead and reed hastings will never get to be a billionaire. lo and behold he is now back to around $600 million and plus he has sold off shares throughout the program selling over the past five years. so that's hundreds of millions in addition to that. so add the 600 million plus the hundreds of millions, he's probably close to where he was on the peak. >> just to end on the volatili y volatility. we're talking, in december, this was a $60 stock and it was down from 400 and so much emotion plays from here. we have a $200 price target, bt again, what about the idea that some, we could get higher

spending and emotion seems to play a significant role in the movement of this stock. >> that's my -- the hardest problem i have with it is the volatility. sure, there could be something that sparks an emotional roller coaster again in the stock. what i try and do when i look at this company today is look past that. i see a company that's got a good business plan and i see an argument where they could make more money than they're making today. you can make the argument that the stock can continue to work from here. if i get more optimistic about margins which i can easily do that. you can make an argument for a higher price target, but it's a tough game. it's a gut check to be long or short the stock. so it's something that you need to keep in mind if you're looking at it as an investment. >> yeah, carl icahn's got guts, man. he's got a lot of money. >> got a mover in the gaming space today. we'll send it over to josh lipton.

check out gamestop which is enjoying a morning if the green here hitting a new 52-week high. last week the retailer warned of weak sales this year and it also reported a better-than-expected quarterly result. this morning the street is reacting here and a number of analysts raising their price targets including those from suntrust, baird and bmo which is telling its clients the street is focusing on the opportunity for growth in 2014 fueled by the next iteration of game consoles. gamestop is up about 20% so far this year. >> thanks a lot. in case you weren't aware today marx off the kickoff of q2 and rick santelli will talk expectations for the market, the fed and your money. facebook sean parker getting all mid emed evil on us when we com back. we'll explain. you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile.

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welcome welcome back to "squawk on the street." rick santelli here with monday's rendition of the santelli exchange. of course, this is april fool's. besides all the jokes that seem to ensue on this day every year, it's also, of course, a very important day. it's the first day of the fu fiscal year for japan and it's an important first day for the second quarter in our country. maybe one of the most important quarters in a while. i have not been all that

optimistic that many of the programs currently hoping, boy, the economy are going to turn out well when they are bound down. at least for the moment, if i had to summarize everything going on what would be the one sentinel area to pay attention to for the outcome or per pet chew wags in the second quarter of things like the equity markets in the second quarter, it would be europe. why? i just think that you need two big guys on the same page. definitely the u.s. is doing okay. it's doing better than okay in a relative value scenario. china has its fair share of issues. with the data as it is, it's very hard to make a decision exactly how much stability there is. their growth rate 7 1/2% or so looks great but a lot less than it was just several years ago. latin america, i don't think they can carry the weight. neither can the emerging markets. really, i think the cusp is europe. now, yesterday one of the greatest pieces i've read in a

long time, david stockman in the "new york times" wrote, state-wrecked, the cough rupgs of capitalism in america. this piece is what everybody is talking about today. i want to pull one of the early lines he had. let's put it on the screen. we've had eight decades of increasingly fren nettic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. many i know and talk to and deal with on a daily basis agree with this. but, if you look -- he did a great job of running through time for all of the issues. to me, the one major issue that can save us all is a complete unknown. it's the rabbit, pulling the rabbit out of the hat. if you go back to fdr as mr. stockman did, the rabbit in the hat, not a good rabbit but it was world war ii. maybe even more importantly, that after we got off the track a bit, we had ike and martin

there at the fed to give us some stability. but in the end, his last line, if this sounds like advice to get out of the markets and hide out in cash, it is. i don't know what the rabbit will be. maybe it will be a special battery. maybe it will be some invention. americans are good at that. in the end, i'm not sure if any of these programs can end well, but it might not happen in the second quarter. but if it does, make sure you read all the statements because the first thing we need to pay attention to if the fed tapers and the ultimate response in the marketplace will go a long way to enlighten us as to whether the exit is going to be a dark exit or a well-lit exit. david faber, back to you. >> all right, thank you, mr. santelli. that was a very interesting read from david stockman. up next, why major league baseball's biggest, most valuable franchise might not even be a team. brian chapman is going to explain.

houston astros kicking off the 2013 major league baseball season making their american league debut, trouncing their in-state rivals the rangers 8-2. it's mlb's mobile app that's already this big win there

season. our brian shactman has more on that. hey, brian. >> carl, today actually is the official opening day. we have 12 games on the slate. i am in the control room for mlb.com which actually produces a lot of the on tent for the mobile app mlbatbat which just happens to be the most successful and profitable mobile sports app on the entire planet. we all think about football as the country's most popular sport. but the truth is they have not figured out how to do this. it was downloaded 7 million times last year. along with mlb-tv you can basically watch baseball anywhere on any device. when forbes assessed the franchise value, they pointed to the maker and maenlger of the app, mlb advanced media. according to mike who did the research, the group's revenue was around $650 million. and if it were it'ses own entity it would be worth quite a bit more. >> well, in about ten years the value of major league baseball

advanced media has grown to be roughly a $6 billion enterprise. each team owns 1/30th of that. when you factor in what teams are worth, that's adding roughly $200 million to each team's value. >> and if you think about it, the profits from mlb at bat and mlb advanced media, the board of the organization does vote on it. they really are their own entity but they return cash to each team in revenue sharing every years since 2009. so this is a huge boost to every single team. that's why teams like detroit can pay justin verlander and why posey can get a deal from san francisco. it's not just the yankees and red sox who can spend now because of things like this. >> huge numbers, brian. it's a great day. even better day at 1:05 eastern time when the red sox get something going in queens. special thanks to robert frank. you're not down. >> immediate evil weddings. >> rich medieval weddings.

>> yes. >> later on. if you're just joining us, here's what you missed earlier this morning. welcome to hour three of "squawk on the street." here's what's happening so far. >> i'm not a market timer. i just happen to think we have more of the front end of some friends and we should talk about the reindustrialization of america that are going to happen. and so you've got to be involved. >> fundamentally individual and institutional investors are still underweight equities. i think we looked at valuations not being stretched at this point. it's still a great place to put your money. >> get a little reality dose. in m. stocks have gone up very big but we haven't heard anything from quarters, from the earnings. i don't know where that -- where we get great earnings to take stocks even higher. >> and that is what's kept a lot of people out of this marked, the punch bowl, the punch bowl. did you ever spike the punch bowl growing up?

>> when didn't he spike? people are still drunk. >> and that is the opening bell. >> the actions taken in cyprus could set precedent for other countries, especially the periphery, which could cause markets to be nervous. and we have seen a fairly negative reaction to the sim prus workout this past week. >> it's going to be the jobs. we need to see 200,000250,000 jobs, not drop back to 130,000 like we seen last year. ♪ >> good monday morning. we are live here at post 9 at the new york stock exchange kicking off the second quarter of the year. let's get a check on the markets on this first trading day of q2. dow seeing some weakness. a third of percent. s&p is down a little bit more than that percentagewise. down 2/3. nasdaq is trailing performance today. that's a full percentage point, down 23. ebay adding to recent gains after getting an upgrade to bye.

the firm says it's believes marketplaces will be a stable growth engine and sees an upside surprise to intel. and market perform to out perform. the firm noticing risks involving the company's architecture and believes investors should move to the sidelines. road map this morning. dow coming off the best first quarter since '98. s&p ending q1 at the new all-time closing highs. does the rally continue? plus, toys "r" us pulling the plans to go public, putting a damper on a great year for ipos. we'll find out if that is canary in the coal mine. zombies versus dragons. winning big with the "walking dead" but can it compete with time warner and game of thrones? we'll tell you which one is the better investment. but we'll start with the very tense situation in north korea. the country's leader defying warnings from south korea and

washington. richard engel has more on that. >> the mood is remarkably calm. most people think that all of the rhett or tick coming out of north korea coming out of kim jong un, the leader, is a bluff. that he is trying to extract concessions from the west, he wants direct negotiations with the united states, he wants money, and that he's trying to cover up an internal power play within pyongyang itself. the analysis here we've been hearing is that in order to make these changes go smoothly, more smoothly, he's trying to create this external crisis, whip his people up into a war-like frenzy so they rally around the leader while he makes these potentially very sensitive changes. the danger is, this could easily spin out of control. not only is he talking about nuclear weapons, talking about using neck clnuclear weapons, hs also cut off the hot lines, the red phones that exist between sertd world leaders in case there is is a crisis, they can

pick them up and try to mitigate them. he's unplugged the phone which makes a lot of people in the leadership here very nervous, it makes washington nervous. so although the people here are very calm, there is a risk that a miscommunication or a misstep could turn what seems to be a power play by north korea and by the north korean leader into something much worse. >> and our thanks to richard engel in seoul for us this morning. get to markets here at home which are lower on the first day of the second quarter as we said. sam is the chief equity strategist at s and p capital iq. he did raise his tarkt on the s&p to 1670 from 1550. sam, it is great to have you. welcome back. >> great to be here. >> moving 120 handles will get your attention. >> it sure will. >> what are you seeing? >> well, first off, it's a 12-month target. it's not an end of year target. what we're seeing is that we're not getting the kind of pullback initially we thought we would be getting. since our year ahead outlook is

still relatively positive based on fundamentals, you know, the slight uptick in the trajectory of the low-flying economy, et cetera, you know, the pullbacks, the corrections will take care of themselves. they could end up being a good buying opportunity. but a year from now we think that the market will be willing to pay 14 to 15 times which is still a discount to the average pe since this bear market started in 2000. >> the bears continue to argue margins have nowhere to go but down. the lifespan of this bull market is getting to the long end of bull markets historically. >> right. >> are they wrong? >> history would say they're wrong. there's no guarantee that they're wrong. but let me tell you, whenever we have had a bull market celebrate its fourth birthday, 83% of those bulls went on to celebrate their fifth birthday. 21% was the average gain in that fifth year. and four of the five rose by 16% or more. so basically what it indicates is that, yeah, we have a very

good chance. like demographics, good chance if you're 65 of making it to 75. >> you do say it's going to be a volatile journey to 1670. by that you say, significant top in the months ahead, that meaning what? >> again, i look to history as a guide, not gospel. that sense world war ii, after eclipsing the old high, the market tends to climb about 3% before then falling into a decline that averages 13%. we've had five pullbacks, 5% to 10% declines, 6 corrections but 0 bear market. i feel it would end up being a good buying opportunity, not a reason to bail out entirely. >> all of these defensive leaders we've had so far this year, is that where the generaling still will be? >> t not a year from now. historically heading into the fifth year, yeah, people are still uncertain so they're gravitating toward the defense. this might last a little bit longer because we have the reluctant retail investor who is just getting back in and they're

saying, look, i don't really want to go near high beta stocks. let me go low so i will be protected. bernanke, we want to focus on higher yielding industries. >> is there a way to model in the outlier effects that the fed has introduced, this time around? this is not like '87 and the fed looks different, right? >> it does look different. back in the summer of '87 greenspan raised interest rates and that threw us into a tiz zi. it was also compounded by the program trading. this time around, you know, the fed has pretty much told us they don't plan on raising rates until 2015. what could spook us is investors playing musical chairs trying to anticipate when the music will stop and seeing some sort of a knee-jerk reaction beforehand. >> we mentioned the closing high that we got on thursday. you say that matters little to you. is there a metric or is is there a hard number that matters to you more? >> well, here i'm quoting our chief technician and i agree with him that the level itself

is not as important as what we do after hit that level. his feeling is if we move up two percentage points, come back and retest that old high and we successfully bounce all of it, that would be a positive because the implication is that that there's still an awful lot of demand out there and the next stop would be something above 1600. >> finally, sam, in a move like this, is your heart in it or is it -- do you feel like you've been cornered into this move the way a lot of target increases we've heard lately, they almost seem begrudging because this music is still playing and they feel like they have to dance. >> my health is in the 12-month target. what i do worry about is saying that this time is different, that we won't have a digestion of the games. 11 of the bear markets since world war ii, nine of them we had advances of single digits before slipping into a major decline. there's no guarantee we won't have a decline but i keep

thinking we will. >> all right. it's been fascinating to watch, sam. it's a good note, anybody who is interested should take a read. >> thank you. >> sam stovall. josh lipton, a quick market flash here. >> carl, check out apple which is slipping this morning. remember, apple tanked some 17% in the first quarter. analysts spoke saying if apple different quarter, same awful price action. we also learned today that the fidelity contra fund which is the largest active share holder in apple cut its stake. the bigle older is google. google is up 24%. apple down some 28%. carl, back to you. >> all right, josh. thanks for that. it had been a banner year for, i pos as you know already. but news that toys "r" us is pulling the plug on its plan to go public now has people worried. we will take a look at what's ahead this year. first, though, rick santelli watching some commodities today. hey, rick. >> hi, carl. absolutely. you know, the post-hiccup of

usda report last week which told us a lot of corn planting is expected, beans, but we still see over 40 cents lower in corn and down in the teens in wheat and beans. commodities haven't done well but the crb's only down a whisker on the year. what's going on with commodities. you can't print them, that makes them sometimes a better trade. frank is is going to decipher all the ad commodities at the bottom of the hour. can bant to be here for that. a tough act to follow,

that's what they can do with you. let's get to work. ameriprise financial. more within reach.

. 2013 has seen 31 . 2013 has seen 31 ipos already. a lot more still in the pipeline. news that toys "r" us, one of the most highly anticipated ipos is dropping its plan to go public has people worried. jacqui deangeles has this. >> carl, withity withdrawal of the toys "r" us ipo last week, the company saying it was due to unfavorable conditions. there has been, as a result of that, a lot of chatter about how ipos shaped up in the first quarter and what deal flow looks like for the rest of the year. in q1 ipo activity held relatively steady. there were 31 for companies with a market cap over $50 million. raising $7.6 billion. that's according to renaissance capital. ipo performance outpaced the broader market for a return of the quarter up 18%. there is also a shift toward yield plays. that said, it's a little tough to predict what we're going to see for the rest of the year since the implementation of the

job's act, smaller companies can file confident ali and many are going that option. that makes the pipeline appear like it's smaller but paul with renaissance capital tells me there's actually a lot of activity occurring out there behind the scenes. some of the notable deals we'll be watching for is bausch & lomb, coty and cow and seaworld. they also say that wild financial deals were the most pervasive in q1 there should be more tech dealts later this year. watch for those. enterprise software firms, marketo and fireeye and lifestyle media company glammedia have filed confident ali. while several other tech companies have hired banks in preparation for their ipos. carl, independent bank group expected to price in the 24 to $26 range, offer 3:.2 million shares. and a smaller deal, har ward apparatus regenerative.

>> thank you very much for that good piece. jacqui deangeles back at hq. i want to bring in david menlo. let's give the toys "r" us thing out of the way. a derailer of sorts? >> no, i don't think it's a derailer. i think it's really letting the market know that just because you have private equity sponsorship doesn't mean the deal is just going to have the doors open wide. the investors out there are becoming very suspicious of all of these pe deals because the underwriters unfortunately are still favoring the issuers. >> there's a very fine filter through which deals have to go. >> yes. it's not any more where the ipo market is coming back. the economy is coming back. let's make sure we can get where it is. how much can you get me? talk to me about this stock. does it really make sense? >> the deals that jacqui brought up, the bausch & lombs, the cotys, is there a stock in there? >> i wouldn't say that. there are all some very good names. the real quee key is going to be the valuation modeling that

comes out. and as the market don't to improve, obviously the valuati n valuations can move higher. we're still in the early phases. >> there's some discipline in pricing, young? >> absolutely. except we can't get the issuer -- i mean, the underwr e underwriters to understand that the buyers are looking for this. they want to know how much they can get from the issuers. >> speaking from that demand metric, you're looking at secondaries as a clue to much money there is. >> i think the entire financial markets as it relates to corporate finance activity on the ek canity side is focussed on the secondaries. we have over eight times more in the quantity offerings that are coming on secondaries than we have on ipos. >> eight times? >> eight times more. plus. and the deals keep coming and coming. the balance sheets look great. everybody is deleveraging and the ones raising money are looking at assetses in current market. >> eight times how much over the average is that, would you say? >> i would say narm ali if we

have a good ipo market down 3-1. last year we were 5-1. now i secondaries, that's where everybody is demanding. >> dooung the pace of q1 continues, accelerates, decelerates? >> i think we define the screen we were talking about. i think investors are going to do some of these ipos. >> nice 75 cent word. >> 76 plus tax. they're not going to have the patience for it. there's a deal that came out from goldman. $20 pricing. the book was at $19. investors are saying fool me once, that whole adage. >> finally, is there any lingering affect of facebook, weighing on this market in i an w way? confidence in market structure, exchang structure, any of that? >> yes, yes, yes, and a couple more you could answer yes to. this was a horrible event for the marketplace. i still feel the scars run very deep on this. anything that is coming that has

this tremendous expansion potential the investors are sitting back saying maybe i don't want to jump in quite as hard assy trizos y the first ti find out who is getting married medieval style and you know his name. we'll be right back.

facebook is set to make a big announcement later this week. julia boorstin has more on that. >> on thursday we expect facebook to unveil a new operating system for android phones and to showcase it on a new software on an htc handset. they will give them the option of making the social network the

phone's home screen to drive use for all of facebook's tools including texting, voice calling and e-mail. as zuckerberg said many times, the company isn't interested in building a handset but the hope is an operating system for multiple devices could have a bigger impact. the more time facebook can get people to spend with its services the bigger the potential revenue. around 680 million people already s. has facebook on their moeshl devices every month. the big question is how many people will want facebook to be the filter for all of their communication. what does this mean for android? if facebook's new software is a new hit, it could sell more devices giving it an advantage over apple. on the downside if facebook lures uses to use the new graph search that could steal it from google. it does make sense for facebook to double down on mobile opportunities where consumers are increasingly spending their time and facebook seems to hope this move will tackle its biggest challenge, making more money from mobile users.

carl? >> you know, julia, it seems like there's a big announcement, quote, unquote, from facebook every other week or so. graph search, the new time line. how big do you feel this one is going to be and are we suffering from a little big announcement fatigue? >> well, we'll have to see. there's been a little bit of debate here about h ch is a bigger deal, graph saefearch or this. i think it depends on how cool it looks. there's a lot of skepticism that people who already have phones and already have a facebook app on their phone would want to switch over. i think this has more potential for new mobile phone users. for this to really be a big deal it would have to be available on a lot of phones and not just on htc handsets. it's a little too soon to say. i'm going to be there on thursday and i'm excited to see what it looks like. >> i figured you would say that, julia. thanks so much, julia boorstin in los angeles. facebook, of course, is trying to rally offer the lowest levels of the year. zombies have been good for amc

but can they compete with time warn warner? we're going to dive into the zombie effect when we come back.

couple 06of hours of tradin into the q2. 11:27 on wall street.

shares of hess, new 52-week highs. selling the russian unit to luke oil for just over $2 billion. chairman and ceo says the sale is part of the plan to transform hess into a higher growth, lower risk, pure play exploration and production company. molson coors up. goldman upgrading them from buy to neutral citing a recovery in north american beer volumes. the u.s. supreme court has declined to hear a case surrounding a federal rule making the airlines do this. it was upheld by a federal appeals court in july. let's get a check on energy and commodities for us this morning. sharon epperson is at the nymex. >> looking at a decline across the nernlg sector. wti is leading this decline. down almost a dollar. so just above $96 a barrel. we had told you about what has happened with the exxonmobil

pipeline that was taking crude oil from illinois to texas and the fact that there was a spill along that line on friday. clean-up operations are still under way. the concern is that we're going to see perhaps a backup into the u.s., midwest into curbing, oklahoma. that is what is helping to depress the wti, the u.s. oil price. we will continue to watch that situation and the clean-up efforts under way. meanwhile, keep your eye on gasoline because good news there. gasoline futures are on the decline. they had been on the decline. that has impacted prices at the pump. they're now cheaper than they were a year ago, cheaper than they were a month ago. consumers are paying about $154 million less each day on this april 1st day than they were a year ago. that is according to opus, analyst estimates. $3.36 a gallon right now. that is down 30 cents from a year ago. >> sharon epperson, thanks so

much. . is here. >> a lot of people want to shoot against the rally that we had. gotten killed so badly. generally the first day of the quarter is not a good time to do it. they got a little bit of help because what we had here with the isn today did not help at all. take a look at the s&p futures here. this is just the s&p. but there's 10:00. we just went straight down and lost all energy on that number which came in a bit below expectations. we were looking at 54. it was 51.3. basically the bottom dropped out of the market. we had some problems with momentum in the last few weeks. i know we're at new highs but it's been a very defensive tone in the market. if you look, for example, the bigger sector in s&p is technology and financial stocks. put up technologies for the last few weeks, this is just the last two weeks. basically we've been sideways to slightly down. this is a huge sector. not helping us. financials, another one. biggest sector out there right now. put up the financials here. this is the s&p 500, by the way. last couple of days and, sorry,

got that wrong. bottom line here is that we have passed below the levels of last thursday in is called an outside reversal day. this has been happening several times. i think this is the third time in the last couple of weeks of it's been happening. let's show you how weak we've been. the two major sectors. first one is technology stocks. s&p tech group in the last two wee weeks. basically side ways to down. put up financials here. also the largest group here. same situation. it's a two-week chart you're looking at. sideways to down. remember, we're at new highs. it's the defensive names. consumer staples, utility stocks that have been moving forward. there's consumer staples. there's an up trend in the group. it's also, if you look at, for example, health care stocks. defensive tone to the market even as we are at new highs overall. one other serious problem is with energy stocks which have stalled down. sharon noted how weak oil was. big energy names. unusual day when you get energy

down when the rest of the market is down 1%. halliburton all on the weak side. none the less, i do not see any signs of serious efforts to go out and short the market. one of the things you watch is the ultrashort etfs and pro shares has one. this the big one. sds is the symbol. two times the inverse. so if the market goes down 1% on a day, you make 2% on this. very difficult to play this. daily thing you've got to play. i don't see, carl, any big pickup in volume here. i saw a lot of people throw in the towels as the market kept dropping as they market kept going up. this goes down as the market goes up. >> sure. >> i do not see days where this thing spikes up when the market's down that much. these people are still suspicious about jumping in. watch this as a sort of indicator of short interest that's out there. i don't see it. >> interesting stuff. bob, thank you very much. bob pisani. let's get to cyprus where the central bank confirms major depositors face losses of around

60% of savings, well above the initial cut of 30 to 40%. our chief international correspondent michelle caruso cabrera at hk with the story. >> over the weekend the central bank of cyprus revealed how much the depositors and bank of cyprus will suffer as they restructure that bank. deposits and i want to emphasize this under 100,000 euros, fully protected. over 100,000 euros, 60% of them will be frozen. first 37.5% converted to stock in the bank of cyprus. remaining 22.5% held in case things get worse. also converted to stock. i've got many, many questions about whether or not what happened in cyprus could happen here in the united states. we brought back a graphic we used once last week to try to explain why their banks are different than u.s. banks. we are using the battlefield as a metaphor. on the right-hand side of the graphic, a bank, the capital structure of a bank. it is facing off against an army of bad loans on the left side of

the battlefield. in this battle, the first line of defense, the shareholders or the infantry. they're the first to get wiped out. go to zero. second line of defense. junior bondholders in the bank. think of them as the cavalry. they get wiped out next. third line of defense, senior bondholders, equivalent of the artillery. they're all in place to protect the innocent civilians who live in the town. that would be the depositors. here's what's key. watch this graphic now. in the cyprus banks the lines of defense were very small, very weak. the infantry was teeny, so was the calfry and or tellity republican now, and this is a broad generalality. compare that to the united states. see what happens? see how much larger the infantry, the cavalry and artillery is, generally speaking? you shouldn't conclude that it can't happen in the united states but it is extremely unlikely to happen in the united states because there's a lot more to protect the depositors. we plan to keep this graphic over time and maybe get exact metrics over there.

et cetera, as we start to move through the financial crisis and when they start to unwind the financial institutions. definitely need to be unwound over there, carl. back over to you. >> as a meyer of metaphors, that is beautiful. twha is that your idea? >> yes. >> the percentage to gdp. >> yeah. >> cyprus versus our banks. everybody once you include a deposits. but that's a great metaphor for how this is all going to go down over the next few years. >> thank you very much. >> back safely. let's get to rick santelli from chicago at commodities. spring planting season, rick. >> it is. but i can't help, frank and i, we were listening to michelle caruso cabrera's wonderful piece. some 60%. i looked at frank and said they should have at least traded commoditys. if you lose 60% you have a lot more fun that way. don't you, frank?

>> indeed. >> when i look at the crbi commodities, copper, things like that. it's not down much for the year. it's just under 293. so it doesn't look so bad. you had a bit of a different take. >> part of this ongoing is i think the energy prices which have been staved off here and had been advancing are masking some of the kind that we've seen in all of these other markets. when you take a look at cattle, we're at 132, down at 124s right now. that's a 120 load. >> is 132 is the end of last year, end of last quarter. >> this year, too. hog prices, up above a dollar. down 90 cents. over there we know what's happening right now with the agriculture prices, the corn and beans and wheat. >> we had a report friday of last week basically said the most planting since 1936 and stockpiles of current commodities we have at least in terms of beans were better than we anticipated. we see the prices going down for a second day.

all right. hit me with commodities on aeg. >> the quarterly grade stocks show corn a lot more stocks than we had thought. they upped stock levels by 400 million bushels in corn. up 300 million bushels in soybean. we had a big decline in price. down the front end on corn. may corn, down. 30 or 40 cents on new crop december corn. beans not so much. off about 60 cents in front end. 30 in the back. >> commodity trader and i'm looking to planting is just coming down the pike pretty quick. what's a simple strategy for trading the grains this season? >> well, right now i think we want to look at the planting intentio intentions. they're just that. intentions. we don't know if we're really going to get in. you know, look at last year. we had a great start and look what it turned into by june. planting intentionses are just that. we don't know if that's going to

go in there. for the back months, you know, you might want to take a look at trying to be a buyer down here on this washout just because of the fact that we may not be able to plant all that's we're looking at. >> intentions, in essence, the presupply of corn might be estimated at the biggest it's going to be to only get modified a bit. what about energy, we did start out with energy. do you see energy prices remaining bland for the rest of the time as we get ready for driving season? >> no, i would imagine that we're going to start to see energy prices come down as well in is all about supply and demand. big supplies of all of these different commodities and a lot less demand. we take a look at copper. we're at, what, 390s. down to 330s. >> despite the optimism bob has in the global economy taking a bit of a toll in that area? >> go new orleans doubt about it. >> carl, back to you. >> you know that's true, rick. thank you so much, rick santelli. when we come back, zombies versus dragons.

"the walking dead" and "thrones" airing big last night. later on, do you want a chance to advance to facebook before it was public? how about twitter or yelp? with microventures you could have had the chance. the ceo will join us live to talk about how. the ceo will join us live to if i take to ford it's going to

coming up next, what's next for stocks? the legendary jack boegle joins

us. now that mcclin den is out at chesapeake, is it time for you to get in? and best buy in tech, one five-star fund manager has the under the radar names he says is going to beat the market. carl, see you in 20 minutes or so. >> thanks. last night millions of tv viewers were faced with a big dilemma, whether to watch the season finale of "the walking dead" or the season premier of hbo's "game of thrones." both shows have been extremely valuable to network. but can a small amc compete with time warner and hbo? a media analyst at jpmorgan joins us this morning. good to have you, alexia. are we at a stage where these shows have become such big phenomenons they move stocks? >> i would say to so. we're positive in the all of the media sector right now because we are seeing huge audiences to these cable networks as it's a huge investment programming is paying off. wee seeing shows like "the walking dead" grabbing audiences

from the major broud cast networks. >> what does it -- where does it start to bleed in to i'm perically? is it about subscription rates and how fast do they move and how much can you prove that they are due to one show or another? >> i think it's everything. i think it's definitely subscription rates. i think you will see a lot of these renegotiations go a lot more favorably. i think we have been seeing that actually because you get the audiences on part of your network and you're going get higher rates from your cable distributors. >> the cost of content is the other side of that conversation. we talked about netflix with somebody else earlier this morning and the cost of acquiring content or producing a house of cards. is that, in your modeling, is that cost getting out of hand? >> i wouldn't say it's out of hand. i would say it's definitely increasing but don't forget the revenues are increasing so they're putting a lot of revenues back in programming cost and coming up with better shows. so i think at this point you're seeing escalation in cost but i wouldn't say they're getting out of hand. >> let's walk through.

overweight on time warner. neutral in amc. price targets just a couple dollars from one another. which do you prefer? is it clearly time warner and why? >> it is time warner. again, we're positive on the group and we were on positive on amc and took it down to neutral on valuation. time warner we just think there's more upside. time warner is trading at 13 1/2, and you've got amc at about 17 1/2. so a nice premium. you have the forward growth rates are not all that different in terms of what we're expecting at growth in eps over the next year. >> how much of time warner's attempt to put publishing in the different room affects you ur model on them? >> a little bit. not too much. it's a small segment. we've been expecting that for a while so not that much. really what we're looking at me warner for a positive rating is a strength which is phenomenal. don't forget, turner has negotiations ahead of them so they can see a nice pickup in

affiliate fees going forward. hbo is an incredible asset. and then, of course, wb is such a strong studio there. i think it's a whole package you're getting. >> what's keeping amc from getting an overweight from you? >> right now valuation. we love the business. i'm a huge fan of "the walking dead." some of their program is coming off. "breaking bad" is coming off soon. so they do have some pressure in terms of getting some more hits on show which we're mindful of. beyond that it's about valuation at this point. >> we know how quickly tastes change, how quickly a show can fall in or out of favor. is buying amc because of "the walking dead" is that akin to buying a comcast universal because of "les mis quet quet d" did well? >> "breaking bad" got great critical acclaim and did well in terms of ratings.

"mad men" did well and will do well this coming season. they're not just a one-hit wonder. but they do have some pressure from new shows because some of the shows are aging. so i wouldn't say it's the same thing. i think amc has content there. >> finally, i wonder, we talk about housing every day. household formation, if it continues to grow, if people continue to put another cable box in their house or add a cable box in an existing home, that's sort of a tide that's going to lift all boats, isn't it? >> that would be hugely posit e positive. we're not modeling that at this point but that would be the upside, yes. >> alexia, i think the real news is that you prefer "walking dead" to "game of thrones." >> i like them both but i did watch "walking dead" last night. >> it's great to have you. >> thank you. >> if you want to read more about time warner versus amc check out our website sots.cnbc.com and read the companion article by our web editor. if you love the world of start-ups but don't know how to

invest in them, you need microventures. it matches investors with the perfect start-up and the funding begins. the microventures ceo will join us live right after this break. ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss.

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from products to businesses, crown funding has become a popular way to leverage the power of the group towards the common goal. our next guest is looking to own a piece of the start-up pie. they were early investors in the stages of the companies like twitter tim sullivan is the ceo of microventures and joins us from san francisco this morning. good to have you. good morning. >> good morning. >> it occurs to me looking at how it works that the way companies raised money and funding in the past is almost -- it's almost meaningless now. you've totally changed the game. >> absolutely. >> explain for those who are not familiar with the name, how does it work? how do you play in with an entrepreneur's dreams? >> essentially provide equity crowd funding. entrepreneurs can list on our site and have up to -- we have just over 10,000 accredited investors on our site and they can essentially express interest

and then invest directly into that company. >> how has that changed what we used to call early stage funding? historically, you'd have this "a" series round of funding. but it sounds like that comes a lot farther along in the game? >> that's right. angel investors have taken the role of what v.c.s used to be. the v.c.s are still extremely, i would say aggressively participated in this space. but they're taking larger bite sizes later on in the companies' evolutions. >> is it a struggle to find the crowd, to put it in laymen's terms, or the actual funding target? what is the most difficult part about matching those two entities? >> i would say the most difficult part for us is making sure that the investors are legitimate and that the companies don't have major liabilities that will prevent their growth. >> i can see how that would be a problem down the line.

you talked about crowd funding legislation being on permanent standby. i'm not sure what that means. can you talk about that? >> the jobs act which was passed last year have had a number of rules held up by the s.e.c. for good reason. unaccredited investors participating in an extremely risky asset classes is certainly problematic. we don't want another enron or madoff situation. the rest of the jobs act, i think, is going to take some time to work itself out. >> we're showing some of your metrics on the screen. $2 xwl in private placement, 1,500 transactions as a team. how big can you get how many funding targets can you possibly absorb and still do what you do well? >> we were actually just working on projections last week. we can comfortably fund up to 150 companies a year. so not in the thousands but certainly in the 100s. >> certainly anybody who's

starting a business in this country is aware of this and i'm sure looking to you as a tool more and more often. tim, appreciate your time. >> thank you so much. >> tim sullivan, the ceo of microventures. it's a wedding fit for knights of the roundtable. it's monday. a brand new start. your chance to rise and shine.

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welcome back to "squawk on the street." welcome back to "squawk on the street." i'm josh lipton. molson coors inching higher here. talking about a recovery in north american beer volumes helped out by an improving unemployment picture. it's called one of the most underloved stocks in consumer staples. upgraded the stock to a buy. price target 63 bucks. >> josh, thanks a lot. josh lipton. if you're a fan of the

medieval times restaurant or even "game of thrones" this celebrity wedding is for you. robert frank is back on set with some details. do i really want to see this? >> oh, yes. a $1 million wedding is not cool. what's cool is $1 billion medieval wedding. sean parker, the facebook billionaire s going to marry his fiancee on june 1st. the "new york post" reporting that invitations went out on antique scrolls. parker's emerged as the partier in chief of silicon valley. we showed you the mansion in new jersey where he had an engagement party. this is auld stone mansion. 30,000 square foot house. they had ice sculptures and a concert. there was also his recent

halloween party which cost around $150,000 where sean dressed up as justin timberlake. we'll see if he dresses up as john snow or other characters for this latest wedding. it's going to be in the big sur in the forest. have that nice, foggy medieval aura to it. >> bull markets, the graveyards are littered with parties that were huge and big and later parodied because of where they fell in "the times." >> that's a sign to me that the big markets are back. that steve schwarzman party got so much criticism -- >> and then the dot-com boom? >> yes. and sean parker is partying like it's 1999 again and i think it's part of -- we're seeing at the high end parties are back. big event weddings are back. people feel more comfortable about spending on these big events. we don't know how many people are going or what it's going to cost but it's going to be

expensive. >> and parker is not actively trading this market. he's made his money and is living large in general, wouldn't you say? >> absolutely. he's not a ceo, so to speak. he's got a lot of great investments. he's doing a little dabbling here and there. but he's not operating a big company. >> june 1st. >> june 1st. >> are you going? >> i haven't been invited yet. but i'll get the sword ready just in case. >> we did a segment on "game of thrones" now we're doing this. we're definitely covered on that coverage. you're going to come back later in the week and help us out a little bit more. been great having you. >> thanks for having me. >> check out ebay today. if you missed the upgrade this morning, they go to buy from hold, talking about the ability of paypal to surprise to the upside after sitting the first half on the bench. they missed a lot of the run-up in that name.